UPDATE 2-Temasek recoups losses, eyes deals in emerging mkts

* Still open to new investments in financials
(Updates with details, quotes)

By Neil Chatterjee and Saeed Azhar

SINGAPORE, Sept 17 (Reuters) - Temasek recovered from most
of its portfolio losses this year as markets rallied, saving
the Singapore wealth fund's blushes after ill-timed exits from
Wall Street banks and giving it firepower for new deals.

CEO Ho Ching said any dip in markets could be a buying
opportunity for the $122 billion investment firm that is still
open to buying financials and investing in emerging markets.

Temasek [TEM.UL] lost over an estimated $4 billion on
selling its stakes in Bank of America (BAC.N) and Barclays
(BARC.L), but said it had benefited from investing in rights
issues for its portfolio firms such as Standard Chartered
(STAN.L) since these investments more than doubled by the end
of July.

"We are in a very good cash position," Ho said at Temasek's
annual review on Thursday. "We think there are lots of
opportunities in (China and India) over the long-term."

The review showed Temasek's portfolio slumped S$55 billion
or around 30 percent to S$130 billion in the year to end-March.
Its portfolio then rose 32 percent to S$172 billion by
end-July, and its August performance was in line with market
indexes, Ho said.

The firm's value-at-risk was S$28 billion at the end of
March, meaning it had a 16 percent probability it would lose
that amount or more this financial year, down from a
value-at-risk of S$40 billion a year earlier, the review said.

"We believe the worst of the global meltdown risks are
behind us," said Ho. "While there are some green shoots of
growth, some structural risks still remain for the medium
term," she said.

Temasek is Singapore's second-biggest sovereign wealth fund
after the Government of Singapore Investment Corp.

Ho, the wife of Singapore's prime minister, said Temasek's
board would still search for her successor after CEO-designate
and former BHP Billiton chief Chip Goodyear unexpectedly
resigned in July over strategic differences.

"The big issue is new leadership. Strategy comes from the
leadership. Until they sort out the issue of leadership, nobody
is going to be clear what the strategy is," said the head of a
private equity firm in Singapore, who declined to be
identified.

For a newsmaker on Ho, click [ID:SIN529783]

PROFIT HIT

The investment company, whose sole shareholder is
Singapore's Ministry of Finance, said net profit for the
financial year fell two-thirds to S$6.2 billion, as it was hit
by losses on financial stocks and lower contributions from
earnings by its portfolio firms such as DBS Group (DBSM.SI).

"Like investors everywhere they're just relieved that the
market pulled back from the brink," said David Cohen of Action
Economics in Singapore.

The role of sovereign wealth funds around the world, which
oversee about $3 trillion in assets, changed from a key source
of capital for struggling Western banks early in the crisis, to
governments redeploying funds to stabilise home markets.

For a factbox on Temasek, click [ID:nSIN192308].

Temasek said in its annual review it had bought a 19.5
percent stake in South Korea's ENK, a supplier of cylinders for
compressed natural gas, and 15.4 percent of Brazil oilfield
services firm San Antonio International.

For a breakdown of Temasek's investments by region and
sector, click:
here

Temasek has published an annual report since 2004, part of
efforts to be more transparent. Wealth funds have come under
scrutiny from Western governments worried their investments may
be politically motivated.
(Additional reporting by Nopporn Wong-Anan and Brenda Goh;
Editing by Anshuman Daga))